Which of the Following Is an Example of 'Arbitrage

question 57

Multiple Choice

Which of the following is an example of 'arbitrage'?

• A)An investor, seeing that the price of palladium on the metals exchange in two different countries is slightly different, buys on one and sells on the other to make a profit.
• B)An inventor of a new hydrocarbon cracking technology based on palladium buys this metal knowing that its price will rise when the technology is adopted.
• C)A firm buys $250 000 of palladium today, with an option to sell it at $275 000 in one year if interest rates rise above 10%.
• D)A metals merchant is offered $108 000 in one year for $100 000 of palladium today, when the interest rate is 10%.

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Definitions:

Inner Ear

The innermost part of the ear, containing the cochlea, vestibule, and semicircular canals, responsible for sound detection and balance.

Auditory Receptors

Sensory cells located in the inner ear that convert sound waves into nerve impulses.

Dark Adaptation

The process by which the eyes increase their sensitivity to low levels of light, allowing for better vision in the dark.

Physiological Effects

Changes in the body's normal functions that occur in response to internal or external stimuli.